Even with a beautiful new business and first class product, ANA is struggling to sell premium cabin seats and facing an unexpected dip in profit.
Blaming tightened corporate travel budgets, ANA is expected to report a decline in profit of 20% for the second half of the 2019 fiscal year. Business class demand in North America and Europe has weakened, creating a surplus in premium cabin seats that ANA has been unable to sell.
Even as ANA has introduced a beautiful new business class suite on flights to London and soon to New York and Frankfurt, demand has moved in the opposite direction expected. Overall passenger demand has remained steady, suggesting many are choosing to fly in economy class over business class.
While the U.S. to China trade war is also blamed for the slowdown, business class travel within Asia remains steady. Deteriorating relations between Japan and South Korea have been a non-factor, since routes between those two countries have long been dominated by budget carriers.
International cargo is also down by as much as 30% this year on flights leaving Japan, though last year’s particularly strong numbers may have been an anomaly.
I hate to see ANA struggle because it is one of my favorite airlines and offers a consistently superb product. I cannot wait to try ANA’s new business class suite and hope that this dip in profits is not a sign of what is to come for ANA and others.